Shannon County to Build New School with Citi Financing
Over $18 million in Citi Community Capital lending and investing to rebuild a pre-kindergarten through 8th grade school on the Lakota Pine Ridge Indian Reservation, the second largest reservation in the United States
New York - October 3, 2011 – Through the support of GROW South Dakota and the Shannon County School District, a new educational facility for Batesland is under construction. Located in Batesland, South Dakota, the current school is in serious disrepair with part of the facility unusable. The new facility will increase the capacity of the school to accommodate a growing population as well as provide modernized facilities and enhanced technology to improve the quality of education for some of the USA’s neediest students.
The expansion includes the addition of a new gymnasium, classrooms, support areas, reading room/library, community room and a new cafeteria with kitchen, as well as a new geothermal heating/cooling system. Approximately 28,478 square feet will be renovated with an additional 61,629 square feet of new space. There will be a total of five buildings, although the buildings to be renovated and the new addition will be interconnected. The new facility will include classrooms for pre-school through 8th grade.
Senator Tim Johnson (D-SD) said, "This project is a model of how the public and private sector can work as partners to improve the education of our children and provide a near-term boost to the economy. As a long-time supporter of the New Markets Tax Credit program, I am so pleased to see Dakotas America, Citi, the Shannon County school district, and all the other partners making use of that program to the benefit of all involved."
Batesland is the second of two schools financed through New Markets Tax Credit (NMTC) allocations. The first financing, a $24 million transaction, is already providing for construction of Rockyford Elementary School. The current financing will be a combination of a $22 million NMTC allocation from Dakotas America, $12 million in loans from Citi Community Capital and a $5 million U.S. Department of Education grant.
“It is a privilege for Citi to be the lender and investor for the Batesland School expansion project. Not only is this an important facility to expand pre-school education programs and enhance the learning experience for the students of Shannon County, but it will also serve as a showplace for hosting events that will benefit the entire community. It is exciting to know that this school will help meet the needs of the community for generations to come,” said Andrew Ditton, managing director, Citi Community Capital.
The transaction could not have been accomplished without the involvement and support of GROW South Dakota. This private non-profit corporation was established in 2007. Its mission is to create sustainable communities through investments for housing, educational and economic opportunities for the region. For this financing, GROW established a subsidiary entity that will use the funds from the transaction to construct and own the new facility, and lease it to the school district for ongoing operating use.
“Education is the foundation of our future generations. This new financing approach has brought together many partners with the end result providing a modern educational facility to augment learning opportunities for our future leaders in Shannon County,” stated Marcia Erickson, GROW South Dakota President.
Shannon County is one of the poorest counties in the nation, and 97% of the students in the Shannon County School District are members of the Oglala Sioux Indian Tribe residing on the Lakota Pine Ridge Reservation. The building will also serve a number of other community purposes including providing space to meet for extra-curricular activities, and a community and cultural center.
The Shannon County school district currently employs approximately 356 teachers and staff. Teaching and service support positions are among some of the best paying jobs on the reservation. However, turnover rate for teachers has been reported as high as 9 times the national average. The new facilities are expected to reduce the stress of some of the current work conditions, helping to retain a good teaching staff. Additionally, as a larger population of students is able to attend school in the district due to the improved facility, it is anticipated that another 20 jobs will be created.
Citi Community Capital (CCC) is a premier financial partner with nationally recognized expertise in financing all types of affordable housing and community reinvestment projects. CCC's origination, structuring, asset and risk management staff across the country provides creative financing solutions designed to meet their clients' needs. CCC helps community development financial institutions, real estate developers, national intermediaries and nonprofit organizations achieve their goals through a broad, integrated platform of debt and equity offerings. Additional information may be found at www.citicommunitycapital.com. Dakotas America LLC was formed by South Dakota Rural Enterprise and the North Dakota Rural Development Finance Corporation to place New Markets Tax Credit (NMTC) allocations in projects within North and South Dakota. Dakotas America works with developers, local, state and tribal governments, and economic development corporations to identify projects that qualify for NMTC financing. The New Markets Tax Credit program enables Dakotas America to tackle regional projects that will have the greatest positive impact on the communities served, expanding economic opportunity and improving the quality of life in areas that need it most. For more information, go to www.dakotasamerica.com.